DISPATCHES

KENNEDY MAKES HEALTH CHOICE STAND

Sen. Ted Kennedy (D-Mass.), chairman of the Health, Education, Labor and Pensions Committee who has been battling brain cancer, produced a draft of his healthcare overhaul bill, the American Health Choices Act. It aims to improve access to coverage by regulating insurers, expanding Medicaid and the State Childrens Health Insurance Program (SCHIP) and building state-sponsored insurance exchanges or gateways to help Americans find affordable coverage. Most important, it includes a public health care plan to compete alongside private insurers. As ThinkProgress.org summarized the bill (6/8):

EVERYBODY IN, NOBODY OUT: Those who like the insurance they have can keep it, but others, including the uninsured, would be able to purchase affordable and adequate coverage. The bill would prohibit exclusions based on preexisting conditions. Insurers could not vary rates by health status, gender, class of business or claims experience. Insurers would have to accept every employer and individual that applies for coverage and must also renew their policies. The bill eliminates lifetime or annual limits on benefits and limits the cost sharing for certain preventive services and immunizations. Individuals and employers would be required to purchase insurance, but families earning up to 500% of the federal poverty line (FPL)$110,000 for a family of fourcould buy insurance on a sliding scale with government subsidies. Anyone with incomes up to 150% of the FPL$33,000 for a family of fourwould also be eligible for Medicaid, and people up to age 26 would be able to participate in SCHIP. The new state-based insurance exchangeswhere individuals and small employers could compare plans side by side, find options with a minimum benefits package, and buy coveragewould help applicants find and enroll in comprehensive and portable coverage and certify qualified health plans to ensure they provide a level of standard benefits.

A MUSCULAR PUBLIC OPTION: The new public health plan would provide all Americans under 65 the choice of public coverage, restore competition into the consolidated health insurance market, lower health care premiums across the board, lead the way in innovation, and improve health quality. A new public plan has the potential to drive improvements in the health care system and set the standard for developing new payment models and investing in preventive care and care coordination, Peter Harbage and Karen Davenport said in a recent report for the Center for American Progress Action Fund. Critics of the public option, including the insurance industry and most Republicans, argue that a public plan could not compete fairly with private insurers because its lower reimbursement rates would crowd out private coverage and spell death for the private insurance industry. But as health care economist Uwe Reinhardt explains, If the new public plan had to negotiate its own prices, then it would not have a competitive advantage any more unfair than is the ability of large insurerssuch as Aetna and Wellpointto negotiate lower prices with hospitals and physicians than these providers charge smaller insurers. For some reason, no one has ever called this form of price discrimination unfair. Under Kennedys bill, the new public option would reimburse providers 10% above current Medicare rates. It would not have to negotiate its own rates, but could piggyback off of Medicares considerable reach. Using Medicare plus 10 rates, rather than the prevailing market rates, would lower costs and allow the plan to charge lower premium rates.

President Obama is preparing an intense push for the health reform, including speeches, town-hall-style meetings and deeper engagements with lawmakers, the New York Times reported (6/7). His 6/6 radio address kicked off a 50-state grass-roots effort that Organizing for America, the presidents political group, began to promote a health care overhaul. The push also followed Obamas letter to Kennedy and Senate Finance Chairman Max Baucus (D-Mont.), in which he reiterated his support for the public health plan and committed to fully offset the cost of health care reform by reducing Medicare and Medicaid spending by another $200 to $300 bln over the next 10 years and by enacting appropriate proposals to generate additional revenues.

GOP SENS OPPOSE PUBLIC OPTION. While Democratic leaders hold out hopes for a bipartisan healthcare bill, nine Republican senators sent a letter to President Obama (6/8) to express their opposition to a government-run plan that is a central part of his health care overhaul. The nine signers who sit on the Finance Committee include Sens. Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah), Jon Kyl (R-Ariz.), Jim Bunning (R-Ky.), Mike Crapo (R-Idaho), Pat Roberts (R-Kan.), John Ensign (R-Nev.), Mike Enzi (R-Wyo.), and John Cornyn (R-Texas). Enzi is also the ranking Republican on the Senates health panel. The Center for Responsive Politics (OpenSecrets.org) reported that the nine Republicans have taken $17.7 mln from insurance and healthcare interests. Sen. Olympia Snowe was the only Republican Finance Committee member not to sign.

CAUCUSES UNITE BEHIND PUBLIC HEALTH OPTION. Four prominent congressional caucusesthe Progressive Caucus, Black Caucus, Hispanic Caucus and Asian Pacific American Caucushave sent letters to President Obama and the Democratic congressional leadership calling for the healthcare overhaul to include a public health insurance plan similar to Medicare. The caucuses include 117 members of the House and Senate. But the conservative Blue Dog coalition, with 51 members, issued guiding principles that said a public plan should be a last-resort if private insurers are unable to contain costs and provide coverage.

MEDICAL BILLS LINKED TO 2/3 OF BANKRUPTCIES. Medical problems contributed to 62.1% of all bankruptcies in 2007, a study published in the August issue of the American Journal of Medicine reported. Between 2001 and 2007, the study found, the proportion of all bankruptcies attributable to medical problems rose by 49.6%. And 77.9% were insured at the start of the bankrupting illness. Most of the medically bankrupt were solidly middle class before financial disaster hit. Two-thirds were homeowners and three-fifths had gone to college. In many cases, high medical bills coincided with a loss of income as illness forced breadwinners to lose time from work. Often illness led to job loss, and with it the loss of health insurance.

Dr. Deborah Thorne, associate professor of sociology at Ohio University and study co-author, stated: American families are confronting a panoply of social forces that make it terribly difficult to maintain financial stabilityjob losses and wages that have not kept pace with the cost of living, exploitation from the various lending industries, and, probably most consequential and disgraceful, a health care system that is so dysfunctional that even the most mundane illness or injury can result in bankruptcy. Families who file medical bankruptcies are overwhelmingly hard-working, middle-class families who have played by the rules of our economic system, and they deserve nothing less than affordable health care.

The research, carried out jointly by researchers at Harvard Law School, Harvard Medical School and Ohio University, is the first nationwide study on medical causes of bankruptcy. It followed a 2001 study, which was published in 2005, but surveyed debtors in only five states. In the current study, findings for those five states closely mirrored the national trends. The study is available at pnhp.org/new_bankruptcy_study/.

RUSH AND OSAMA VS. OBAMA. Rush Limbaugh and Osama bin Laden have at least one thing in common: They both want Barack Obama to fail. In a tape broadcast on al Jazeera TV (6/3), bin Laden criticized Obamas for continuing George W. Bushs policies in Afghanistan and Pakistan. Obama has followed the footsteps of his predecessor in increasing animosity towards Muslims and increasing enemy fighters and establishing long-term wars, the recording said. So the American people should get ready to reap the fruits of what the leaders of the White House have planted throughout the coming years and decades.

Limbaugh, who has repeatedly said he hopes Obama will fail, spoke approvingly of a call to boycott General Motors products, with hundreds of thousands of jobs at risk in the automobile industry, because the government has interfered in free enterprise. On his radio show (6/5), Limbaugh said, there are a lot of people who are not going to buy from Chrysler or General Motors as long as it is perceived Barack Obama is running it, because people do not want his policy to work here because this is antithetical to the American economic way of life.

Before Limbaugh joined in the jihad against GM, the companys Chief Financial Officer Ray Young told Paul Eisenstein of TheDetroitBureau.com (6/4) he didnt think the boycott, which was promoted by radio talker Hugh Hewitt (6/3), would cut into sales. I believe the vast majority of Americans want us to succeed, Young said. Industry analyst Jim Hall of 2953 Analytics cautioned, You always worry when people are organized against you, but, he added, youre talking about a small wing of a party thats imploding.

OBAMA UNDERCUTS EXTREMISTS. The AP reported (6/7) that President Obamas speech in Cairo on 6/4 has already begun undercutting extremists in the Middle East. From Lebanese guerrillas to Saudi preachers, Islamic extremists have warned followers not to be taken in by President Barack Obamas conciliatory wordsa sign that some may be nervous about losing support if animosity toward the US fades. ... One militant Web site that often carries statements from al-Qaeda had unusual praise for Obama after the speech, noting his quotations from the Quran [the Islamic holy book] demonstrated respect for Islam and branding him the wise enemy. On 6/7, Obamas call for political moderates in the Muslim world to fight extremism may have helped tip the weekend's parliamentary elections in Lebanon to the pro-Western March 14 Alliance.

GOP REP UNDERMINES US IN CHINA. Rep. Mark Kirk (R-Ill.) reportedly went to China recently to tell Chinese officials not to trust the Obama administrations assurances of financial stability, AFP reported (6/9). At a meeting of the Center for Strategic and International Studies, a Washington think tank, Kirk said he told Chinese officials, including the central bank chief, that the US budget deficit could be even bigger than predicted, due in part to the rising costs to the US economy of health care. One of the messages I hadbecause we need to build trust and confidence in our number one creditoris that the budget numbers that the US government has put forward should not be believed, Kirk said. Congress is actually going to spend quite a bit more, he told the Chinese, who hold some $700 bln in Treasury bonds.

Kirks assessment differed with that of Treasury Secretary Timothy Geithner, who said a week earlier on a separate visit that Chinese leaders had expressed justifiable confidence on the future of the recession-hit US economy, AFP reported.

Kirk, who is considering a run for Obamas old seat in the Senate, traveled with Rep. Rick Larsen (D-Wash.), who co-chairs the congressional US-China Working Group with Kirk. Larsen painted a less gloomy picture of Chinese officials views. He said the Chinese leaders were interested in seeing the US lead the global economic recovery, AFP reported.

REVIVING EMPLOYEE FREE CHOICE. Sen. Tom Harkin (D-Iowa), who is leading the effort to get the Employee Free Choice Act through the Senate in the face of a Republican filibuster that has attracted a few conservative Dems, said he wont back down on giving real freedom to workers who want to form a union, making sure workers can get a first contract and that there are meaningful penalties to violations of workers rights. If senators refuse to compromise, if they refuse to come to the table in good faith, I will take the original bill to the floor and demand an up-or-down vote. We will see where everyone stands, and working people can vote accordingly, Harkin said at the Americas Future Now conference (ourfuture.org/now) in Washington, D.C. (6/2).

NO FREE RIDE FOR SPECTER. Rep. Joe Sestak (D-Pa.) is moving closer to a primary challenge of Sen. Arlen Specter, the centrist who recently switched from the Republican Party because he figured he could no longer win a GOP primary. Party officials reportedly assured Specter that they would discourage primary challengers, but Chris Bowers of OpenLeft.com noted that Specter has moved to the right in 12 consecutive Congresses; he voted against Obamas budget, said he would vote against the Employee Free Choice Act and refused to commit to support Obamas agenda. He is a longtime proponent of flat tax legislation that would cut taxes on wealthy Americans and raise them on poor Americans; he ran for president as a hawkish flat-taxing Republican in 1995.

WHOS AFRAID OF INTEREST RATES? Niall Ferguson wrote in the Financial Times (5/29) that yields on 10-year US Treasury bondsgenerally seen as the benchmark for long-term interest rateshave jumped 81% since December. Ferguson saw that as market verdict that the US government is running unsustainable deficits. But Ezra Klein wrote at voices.washingtonpost.com (6/5) that the 3.73% rate on 10-year Treasury bonds to which Ferguson referred was still among the lowest in 30 years and the December rate was exceptional because Treasury bonds were seen as the only safe investment. It looks like the bond market is rising a bit because investors are finally thinking it safe to invest in other things. Thats a good thing. A world in which the continued creditworthiness of the US government is the only safe investment is a bad thing.

SOCIALIZED MEDICINE? Ezra Klein, who has been running a primer on health reform at voices.washingtonpost.com, also noted (6/9) that socialized medicine means that the government owns the means of providing medicine. Britain has socialized medicine. In America, the Veterans Health Administration is socialized medicine. I have literally never heard a proposal for converting America to a socialized system of medicine, Klein wrote. And I know a lot of liberals.

Single-payer health care is not socialized medicine, Klein added. Its a system in which one institution purchases all, or in reality, most, of the care. But the payer does not own the doctors or the hospitals or the nurses or the MRI scanners. Medicare is an example of a mostly single-payer system, as is France. Both of these systems have private insurers to choose from, but the government is the dominant purchaser.

GOP BUDGET CUTTERS TARGET ED OPPORTUNITIES, BIKE PATHS, TECH. House Republicans on 6/4 sent President Obama a proposal that they claimed would cut $375 bln from the federal budget over five years. However, the AP pointed out, many of the GOP cuts havent been estimated by federal scorekeepers and the party has padded its own estimate by assuming $317 bln over the next five years from limiting non-defense agency budgets to inflation-adjusted levels that Obama is sure to reject.

So the GOP actually came up with $23 bln in specific cuts over five years, or $5 bln the first year, less than a third of the $17 bln in cuts that Obama proposed for the fiscal year that begins in October, and 0.14% of the $3.55 tln budget.

The GOP targets include $183 mln a year for building sidewalks, bike paths and crossing guards as part of the Safe Routes to Schools program. Also proposed for termination is the Womens Educational Equity program, which promotes education equity for women and girls through competitive grants, saving $2.4 mln annually. The GOP proposes to eliminate the Robert C. Byrd Honors Scholarship Program, which provides scholarships to exceptionally able high school seniors who show promise of continued excellence in postsecondary education, saving $40.6 mln annually. It would eliminate the Technology Innovation Program, which supports high-risk, high-reward, pre-competitive technology development, saving $69.9 mln next year.

Other proposed cuts include:

 $72 mln a year from the USDAs Market Access Program that promotes the sale of brand name products overseas.

 $833 mln a year by eliminating federally funded transportation enhancements like landscaping, preservation of historic facilities, and pedestrian and bike facilities.

 $267 mln a year by eliminating retirement benefits for federal workers who retire before age 62.

BUYING JUSTICE OK FOR RIGHT WING. The good news is that the Supreme Court ruled (6/8) that a wealthy litigant should not be able to buy a judge. In the case, Caperton v. A.T. Massey Coal Co., West Virginia coal overlord Don Blankenships company lost a $50 mln verdict to one of its competitors. Rather than appeal his case to a fair tribunal, Blankenship spent $3 mln to elect a friendly lawyer to the West Virginia Supreme Court, even running ads accusing the lawyers opponent of voting to free an incarcerated child rapist, and of allowing that rapist to work in a public school. Once elected by a Blankenship-funded campaign, the newly-minted justice cast the deciding vote overturning the verdict against Blankenships company.

The bad news is that four of the US Supreme Courts most conservative members voted that buying a judge is no problem. In a dissent of the 5-4 decision joined by conservative justices Antonin Scalia, Clarence Thomas and Samuel Alito, Chief Justice John Roberts argued that the decision would encourage groundless charges that other judges are biased. Roberts wrote, The Courts new rule provides no guidance to judges and litigants about when recusal will be constitutionally required. This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be. The end result will do far more to erode public confidence in judicial impartiality than an isolated failure to recuse in a particular case.

ThinkProgress.org noted that Supreme Court nominee Judge Sonia Sotomayor agrees with David Souter that judges cannot be for sale. In a 1996 speech, Sotomayor argued that [w]e would never condone private gifts to judges about to decide a case implicating the gift-givers interests, yet our system of election financing permits extensive private, including corporate, financing of candidates campaigns, raising again and again the question what the difference is between contributions and bribes.

HOURS STILL VANISHING. Jeff Frankel, a Harvard economist and member of the National Bureau of Economic Research, noted that while the Bureau of Labor Statistics reported the job loss for May was about half the average monthly decline recorded over the prior six months (345,000 vs. 642,000). But the numbers of hours worked in May fell at about the same rate as it had since last September. If firms were really gearing up to start hiring workers once again, why would they now be cutting back as strongly as ever on the hours that they ask their existing employees to work? Frankel asked. My bottom line: the labor market does not quite yet suggest that the economy has hit bottom. (Andrew Leonard, Salon.com, 6/9)

PRIUS LOVES GAS TAX. Sales of the Toyota Prius in the US are off sharply, down 32% in May, while they are stronger than ever in Japan. What gives? Keith Johnson at the Wall Street Journal noted that the price of gasoline makes the hybrids more attractive, especially in a recession. Japan, like many European countries, slaps a hefty national tax on gas. Japanese pump prices are about $4.61 a gallon, compared with a US average of $2.50 a gallon. That means that even when oil is cheapor cheapishgasoline prices dont collapse, nor does demand for fuel-efficient vehicles. Which is exactly the kind of policy that US auto executives from Bill Ford to Mike Jackson of AutoNation have called for to shift US consumer tastes, Johnson wrote. But Andrew Leonard of Salon.com noted (6/5) that Energy Secretary Steven Chu recently told the Financial Times that a gas tax is not politically feasible at the present time.